Commentary

B7.513 Calculation of LLP member's tax liability

Business tax
Business tax | Commentary

B7.513 Calculation of LLP member's tax liability

Business tax | Commentary

B7.513 Calculation of LLP member's tax liability

LLPs are normally treated as transparent for tax purposes provided it is carrying on 'a trade, profession or business with a view to profit'. Members of an LLP are assessed to tax on their share of the LLP's income or gains as if they were members of a general partnership governed by the Partnership Act 1890. Although, note that this general rule is subject to the salaried member rules, see B7.514.

Where an LLP carries on a trade, profession or business with a view to profit, for tax purposes1:

  1.  

    •     all the activities of the LLP (whether or not in the course of a trade etc) are treated as carried on in partnership by its members and not by the LLP as such

  2.  

    •     anything done by, to or in relation to the LLP for the purposes of, or in connection with, any of its activities is treated as done by, to or in relation to the members as partners, and

  3.  

    •     the property of the LLP is treated as held by the members as partnership property

As long as an LLP carries on a business with a view of profit, it is treated as a partnership in respect of all of its activities, including any activities which are not carried on with a view of

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